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Costa Rica fiscal austerity and judicial budget disputes

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2026-09-17 16:05 UTC → 2026-09-24 19:59 UTC · added ~~removed~~

Costa Rica is implementing austerity measures to manage rising public debt, which was projected to remain above 60% of the Gross Domestic Product (GDP) in 2026. To address these fiscal challenges, the government submitted a 2027 national budget proposal to Congress that outlines a 3.1% reduction in spending, totaling approximately 12.4 trillion colones ($27 billion USD). These proposed regulations created significant concerns for the Judicial Power. While President Laura Fernández announced a reduction in the proposed cuts—lowering the adjustment from approximately ¢27 billion to ¢11 billion—she placed conditions on the release of funds. The Ministry of Finance intends to release resources in stages, contingent upon an audit of judicial infrastructure trusts, certification by the Comptroller General, and legislative approval. Fernández also questioned judicial spending, specifically citing rising monthly rental costs for the building used by the Constitutional Chamber. Supreme Court Chief Justice Orlando Aguirre criticized this approach, arguing that conditioning resources “undermines the independence of the judicial branch.” The standoff has sparked public protests in San José over concerns regarding the separation of powers. Michael Soto, acting director of the Judicial Investigation Organism (OIJ), warned ~~the Legislative Assembly's Treasury Commission~~ that the cuts would leave judicial police in a state of “very high vulnerability.” ~~Soto noted that~~ Adding to these fiscal pressures, the OIJ ~~faces~~ has warned that a new legislative proposal from the Ministry of Finance could result in an additional budget reduction of ~~roughly ¢3,500 million. He further highlighted operational challenges, such as~~ 3,969 million colones. The proposal seeks to revise tax exemptions, requiring the ~~high costs of destroying seized drugs, noting~~ OIJ to pay a 13% Value Added Tax (IVA) on purchases starting in 2027. Soto noted that losing this exemption would complicate operations and impact the ~~agency must sometimes hire private companies or utilize U.S. government aircraft for disposal due to~~ purchase of critical equipment ~~repair needs.~~ and supplies necessary for fighting crime.

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